2016 Case

Diverse Minerals Co.:

The Windgate Diamond Mine

This case was prepared for the World Mining Competition by Ken Mark. The situation
described in this case is based on a combination of real and potential events and key
identifying details have been disguised. the World Mining Competition Organizing
Committee holds the copyright for this case and the case cannot be reproduced without
express permission from the World Mining Competition Organizing Committee. To
order copies or inquire about permission to reproduce this case, please contact
landon.sobush@worldminingcompetition.com.

www .W orld M ining C ompetition . com

 Diverse Minerals Co.: The Windgate Diamond Mine

Diverse Minerals Co. (DMC), a fictional mining company, is working on the final version of
its mine feasibility study for its Windgate Diamond Mine in Wyndham, Australia. Located
close to Rio Tinto’s successful Argyle Diamond Mine, DMC’s venture is fully-financed, ready to
proceed in the next few months.

An opportunity has come up to look at a different model for the mining pit. DMC’s current
feasibility study envisions a Shallow Pit mine and the engineering consultant has suggested it
may be possible to put in a Steep Pit mine.

DMC has hired your team of consultants to assist it in its evaluation of the new option. Your
task is two-fold: review the financial and engineering proposal related to the Steep Pit mine
design and analyze, in general, DMC’s assumptions and model for its Shallow Pit Mine.

Diamond Mining in Australia

Diamonds were first mined in Australia in 1851, in the Bathurst area of New South Wales.
Alluvial deposits were found in other parts of New South Wales – in Copeton and Bingara –
and mining operations existed there from 1867 to 1922.

While the most significant diamond mine in Australia, the Argyle deposit, produces low gem-
quality diamonds, new discoveries made by DMC in the East Kimberely region of Western
Australia have led to the potential to produce gem-grade diamonds from open pit mining.
At Argyle, a number of small diamond kimberlite pipes have produced higher quality gem
stones, but none that have matched the potential deposits as discovered by DMC.

Diverse Mining Co.

DMC is a Vancouver-based company engaged in the acquisition, exploration and

development of mineral properties. DMC was involved primarily in nickel and cobalt
exploration in Canada and, in 2011, successfully sold a package of four properties to a large
European mining firm for $2 billion in cash.

The opportunities at Windgate included four deposits, the most promising of which was the
Gibb Deposit. Windgate was located in Wyndham, Australia (see Exhibit 1 for a map of the
location) and DMC’s involvement in the area dates to 2009 as a result of a meeting with a
mutual contact in the diamond mining industry. Three large diamond miners passed on the
opportunity, believing the Kimberley area to be of, primarily, low-grade gemstones. With the
sale of the four properties, DMC turned its attention to diamond mining, acquiring the mineral
claims in the Wyndham area from 2012 to 2014. The mineral claims were valid until 2022. All
other exploration programs at DMC were put on hold to allow the Company to focus on
managing its Australian project.

The 5th Annual World Mining Competition 2016 Case | Page 1

 Diverse Minerals Co.: The Windgate Diamond Mine

The opportunities at Windgate included four deposits, the most promising of which was the
Gibb Deposit. Windgate was located in Wyndham, Australia (see Exhibit 1 for a map of the
location) and DMC’s involvement in the area dates to 2009 as a result of a meeting with a
mutual contact in the diamond mining industry. Three large diamond miners passed on the
opportunity, believing the Kimberley area to be of, primarily, low-grade gemstones. With the
sale of the four properties, DMC turned its attention to diamond mining, acquiring the mineral
claims in the Wyndham area from 2012 to 2014. The mineral claims were valid until 2022. All
other exploration programs at DMC were put on hold to allow the Company to focus on
managing its Australian project.

Various exploration techniques on Wyndham resulted in the decision to move forward with
an aggressive 15,000 tonne bulk sample program to recover 2,000 carats of diamonds. By
2015, this sample program was successful, recovering gem-quality stones from the Gibb
Deposit. A small processing plant was constructed and commissioned, and a main shaft was
sunk to a 250 metre depth. Three additional bulk sample phases were completed in 2015,
bolstering DMC’s claims about the deposit. In parallel, DMC worked with the regional and
state governments in Western Australia to secure the necessary environmental and other
permits for the mine.

After spending a significant amount of money exploring the diamond property, DMC had
earmarked a portion of its remaining $2 billion in cash to fund the entire development of the
Gibb Deposit in Windgate. At present, DMC contemplates injecting $200 million in equity,
in cash at Windgate, in total. A preliminary analysis saw the remaining amount required to
finance the mine coming from a line of credit that Windgate had secured.

There will be a new corporation set up to hold and operate the Windgate project. This
corporation will be 100% owned by DMC. If there are further cash requirements beyond the
$200 million, DMC has been given a $3 billion revolving line of credit it can use for the project.

DMC is open to other ways to finance the mine. The most recent information received by
DMC’s management team suggests that senior bank debt may be available at a rate of
7.0%, and up to $1 billion may be available to DMC. Security for the senior bank debt would
be pledged by DMC, on behalf of its Windgate subsidiary.

Due to the proximity of Rio Tinto’s Argyle Mine, there was extensive infrastructure already built
and DMC had negotiated a deal with EnergyAustralia to provide the necessary power and
hydro resources for the mine’s development and production.

The 5th Annual World Mining Competition 2016 Case | Page 2

 Diverse Minerals Co.: The Windgate Diamond Mine

The Gibb Deposit at Windgate

The project encompassed the Gibb Kimberlite deposit, which straddles a mineral disposition
boundary between ground that is completely owned by DMC and partly owned by Rio Tinto.
The project will be operated by DMC and will be explored and developed as a single entity.
The revised resource estimate is based only on the Gibb Deposit portion owned by DMC.
DMC holds an additional 25 mineral claims in the adjacent areas, potentially allowing for
three more deposits. The size of these other deposits have not been determined.

The mineral dispositions are located on State land and the State owns all surface rights in
the area of the Gibb Deposit and of the other potential three deposits at Windgate. All
environmental and other approvals have been received by the State and the project is
ready to proceed. There are no issues related to Aboriginal land issues as the area does not
lie within traditional Aboriginal territory used for hunting, fishing or trapping.

The project is accessible by paved highways, a grid gravel road system and an extensive
network of roads passable to four-wheel drive and high-clearance two-wheel drive vehicles
all year round.

The area around Windgate is arid and desert-like. The average annual rainfall in the region is
245mm. However, this value varies greatly due to the potential for torrential rainfall to occur
from cyclones. Temperatures in the region remain hot to warm throughout the year. The
average high is 31oC and the average low is 18oC.

DMC has gathered some information on Rio Tinto’s Argyle Diamond Mine.

Argyle Diamond Mine

Rio Tinto owns and operates the Argyle diamond mine in the remote East Kimberley
region of Western Australia. The mine has been operating since 1983 and has produced
more than 800 million carats of rough diamonds. It is one of the world’s largest suppliers
of diamonds and the world’s largest supplier of natural coloured diamonds.2 Exhibit 2
provides information on the Argyle mine. The Argyle diamond deposit, located in the AK1
pipe was mined using conventional alluvial and open pit mining from 1983 to 2013.3

The Argyle mine is the first commercial diamond mine dug along an olivine lamproite
volcanic pipe rather than a kimberlite pipe. The Argyle volcanic pipe is a diatreme formed
by gas or volatile explosive magma which has breached the surface to form a “tuff”
(consolidated volcanic ash) cone. The Argyle mine also has alluvial mining operations.
2
http://www.riotinto.com/australia/argyle-4640.aspx
3
http://www.riotinto.com/australia/argyle/mining-and-processing-10556.aspx

The 5th Annual World Mining Competition 2016 Case | Page 3

 Diverse Minerals Co.: The Windgate Diamond Mine

Argyle Diamond Mine

The Argyle mine is the largest raw diamond producer in the world, but a low percentage
of its yield (around 5%) is gem-quality. The worldwide average yield of gem-quality
diamonds is around 20%. The remaining 95% of Argyle’s production is classified as “near
gem quality” and “industrial grade”.

Australia’s Argyle pipe diamonds are approximately 1.1 billion years old, while the
volcano which created the pipe is around 1.5 billion years old. This 400 million year gap
represents a relatively short period for diamond formation. The short gestation period
could explain the small size and unusual physical characteristics of these diamonds.
and The most common inclusions are graphite, crystalline orange garnet, pyroxene,
and/or olivine. Most notably, the carbon found in Argyle diamonds mostly organic in
origin.4

Argyle is owned by Anglo-Australian mining titan, the Rio Tinto Group (60% ownership),
which also owns stakes in the Diavik Diamond Mine in Canada and the Murowa
diamond mine in Zimbabwe. Ashton Mining had the remaining 40% ownership and Rio
Tinto acquired Ashton in 2006.5 In 1996 Argyle turned the De Beers distribution monopoly
on its head by going-it-alone, bypassing De Beers’ Diamond Trading Company DTC/
Sightholder wholesale network, selling directly to the Antwerp diamond trade.

Windgate - Engineering 6

The possibility of mining the Windgate deposit with a steep pit design faces many engineering
challenges. The most concerning of which is pit slope stability. The kimberlitic region of the
proposed pit is composed of competent rock. Both the steep and shallow pit design’s suggest
a 45 degree overall pit angle in this domain. However, the lower Colorado formation which
overlies the Kimberlites is not ideal for open pit operations. The lower Colorado is composed
of mainly shales with interbedded sandstones and siltstones. The drilling program’s performed
on site determined the formation to be roughly 80 meters thick. With a formation top of
330 metres above sea level (masl) and a base of 250 masl. The material is wet which raises
concerns with pore pressures. It was determined that the average angle of friction in the
lower Colorado domain is 34 degrees. The shallow pit is designed for an overall pit angle
of 18 degrees in the Colorado region which is classified as the Country rock domain. The
suggested steep pit design has an overall slope of 26 degrees in this domain.

4
http://diamond-mines.blogspot.ca/2010/11/australian-diamond-mines.html
5
http://www.24hgold.com/english/news-company-gold-silver-agrees-to-acquire-shares-of-ashton-mining-of-canada.aspx?articleid=70568
6
Note that the geology described in this case is fictional – it is not representative of the area being described in Australia.

The 5th Annual World Mining Competition 2016 Case | Page 4

 Diverse Minerals Co.: The Windgate Diamond Mine

Pit modeling and scheduling has determined that production will reach the lower Colorado
formation in the 4th year of operations in both the proposed shallow and steep designs. A
lack of drill hole data in the South East quadrant of the proposed steep pit design has left
a gap in the geotechnical modeling. This gap was filled with estimated data entered by
both geologists and mine engineers. The model shows the quadrant to be stable. However,
engineers modeled a worst case scenario and determined that there is potential for failure
which would result in roughly 20 million tonnes of waste that would need to be removed.
A failure of this magnitude would halt ore production as the pit ramp would need to be
cleared and re-stabilized. There is no option to re-route the ramp to another quadrant of
the pit. Although a failure would only occur in a worst case scenario and there has been no
studies conducted to predict the probability of this failure, DMC would like to take this into
consideration when analyzing the steep pit option. It has been determined that there is no
concern with failure in the shallow pit design.

DMC noted that there will be no differences in the total amount of ore recovered from the
pit, between the shallow and steep pit designs.

An ideal pit design for DMC would optimize production, profitability and safety. A steep pit
design is appealing to DMC as it would reduce the production of waste material. As with any
open pit mine, when increasing the slope angles the need for monitoring slope movement
increases. A pit wall failure would not only affect production but it could also create a serious
safety concern. DMC would like to increase the budget for pit wall monitoring in the steep
model. The main reason being is the safety of employees. DMC believes that you cannot put
a price tag on safety.

DMC would like to use a variety of instrumentation to monitor slope stability in the steep
model if it was the chosen design. Borehole extensometers, 3D LIDAR scanning and slope
stability radar (SSR) would all be used extensively. The cost of instrumentation, software and
technicians to manage the instrumentation have all been added to miscellaneous operating
costs which can be found in Exhibit 4.

Windgate - Valuation

DMC has provided your team with the Shallow Pit cost model (Exhibit 3), the Steep Pit cost
model (Exhibit 4), and production models for both Shallow and Steep (Exhibit 5). All details
are available in the Excel file the DMC team is sending to you. Do note that the DMC team
has tried to estimate the distribution of capital costs across Years 1 through 7, and that these
costs may be subject to revision in the future.

Source – A.C.A. Howe International Limited 981 December 21, 2015

The 5th Annual World Mining Competition 2016 Case | Page 5

 Diverse Minerals Co.: The Windgate Diamond Mine

The DMC team is sending to you a financial model they have created, which includes the
various Shallow Pit and Steep Pit cost models and the Production profiles for both cost models.
An estimate of the financial returns for each of the models is indicated in the respective
“financial model” tab in the file.

You can modify the information and formulae in any of the cells as you see fit. However, the
DMC team suggests you modify only the “blue” shaded cells as part of this exercise. Do take
a few minutes and read the accompanying notes in the Excel tabs as some of these notes
provide valuable information for the analysis your team is about to conduct.

Please note that some of the formulae rely on iterative calculations. You will see “circular
reference” flags – this is normal and the flags should be ignored. In order for the iterative
calculation feature to operate smoothly, please ensure that your team opens up “Excel
Options”, go to the “Formulas” tab and “Enable iterative calculations”.

There are two valuation methods presented for your team’s review: a discounted cash flow
model and an estimate of the internal rate of return to investors.

Included with these is a financial model that will allow your team to analyze the differences
between the Shallow Pit and Steep Pit mines’ economics.

DMC is estimating that they will be able to achieve a value of $900 per carat mined, on
average, for the life of the mine.

All units in the case and exhibits are in metric. Specifically, all tonnes are metric tonnes.

Decision

Your team has been provided with the information to make a decision between the two pit
models. DMC’s CEO is looking for your recommendation as soon as possible.

The 5th Annual World Mining Competition 2016 Case | Page 6

 Exhibit 1: The Windgate Diamond Mine (near Wyndham, in the north)

The 5th Annual World Mining Competition 2016 Case | Exhibits

 Exhibit 2: Rio Tinto’s Argyle Diamond Mine

The 5th Annual World Mining Competition 2016 Case | Exhibits

 Exhibit 3: Gibb Deposit - Shallow Pit Cost Model

Gibb Deposit - Cost Model

Company: Diverse Minerals Co.
Consultant: WMC Consulting
Mine Type: Open Pit
Location: North Western Australia
Pit Design: Geotechnicaly Conservative
Pit Slopes: Kimberlite 45 degrees
Country Rock 18 degrees
Till 12 degrees

\\All costs listed are in 2016 CAD$. The key design criteria, operating schedule, equipment, personnel, supply requirements and costs are listed below:

COSTS

Production

Stripping Ratio: Variable

Ore Production: 45,000 tpd
Waste Production: 202,950 tpd

Haul Distance - Ore 3,500 m

Haul Distance - Waste 4,200 m
Total Resource 56,337,609 tonnes

Hours per shift 12 Hr

Shifts per day 2
Days per year 350

Bench height - Ore 15 m

Bench height - Waste 15 m

Powder factor - Ore 0.25 kg/mt Total powder = 11250.00 kg

Powder factor - Waste 0.40 kg/mt Total powder = 51840.00 kg

Equipment

Type Number Size Unit Cost Total Cost

Hydraulic Shovels 3.00 43 cu m $ 18,000,000 $ 54,000,000
Front-end Loaders 3.00 21 cu m $ 4,500,000 $ 13,500,000
Rear-dump Trucks 24.00 240 mt $ 4,200,000 $ 100,800,000
Rotary Drills 3.00 20.00 cm $ 1,800,000 $ 5,400,000
Bulldozers 6.00 375 KW $ 2,500,000 $ 15,000,000
Graders 2.00 115 kW $ 750,000 $ 1,500,000
Water Tankers 2.00 9,500 liter $ 750,000 $ 1,500,000
Service/Tire Trucks 3.00 1,800 kg gvw $ 250,000 $ 750,000
Bulk Trucks 1.00 450 kg/min $ 600,000 $ 600,000
Light Plants 4.00 8.9 kW $ 35,000 $ 140,000
Pumps 4.00 100 kw $ 15,000 $ 60,000
Pickup Trucks 5.00 680 kg $ 45,000 $ 225,000
$ 193,475,000

Buildings

Shop sq.meters 2,400

Dry sq.meters 500
Office sq.meters 383
Warehouse sq.meters 800
Anfo Storage Bin cu.meters 50

The 5th Annual World Mining Competition 2016 Case | Exhibits

 Exhibit 3: Gibb Deposit - Shallow Pit Cost Model (Continued)

Development

Preproduction Stripping tonnes 227,890,485

Haul Road Construction meters 7,700

Hourly Personnel Requirments

Position Number Rate Unit Cost/Day

Drillers 6.00 $60.48 per hour per man $ 4,355
Blasters 6.00 $60.48 per hour per man $ 4,355
Excavator Operators 12.00 $60.48 per hour per man $ 8,709
Truck Drivers 48.00 $60.48 per hour per man $ 34,836
Equipment Operators 28.00 $60.48 per hour per man $ 20,321
Electricians 6.00 $72.00 per hour per man $ 5,184
Mechanics 24.00 $72.00 per hour per man $ 20,736
Laborers/Maintenance 12.00 $57.60 per hour per man $ 8,294
---- $ 106,790
Total Hourly Personnel 142.00

Salaried Personnel Requirments

Position Number Salary Cost/Day

Manager 1.00 $300,000 per year $ 1,190
Superintendent 1.00 $225,000 per year $ 893
Foreman 4.00 $175,000 per year $ 694
Engineer 2.00 $150,000 per year $ 595
Geologist 2.00 $150,000 per year $ 595
Supervisor 8.00 $150,000 per year $ 595
Safety 4.00 $150,000 per year $ 595
Technician 4.00 $105,000 per year $ 417
Accountant 2.00 $75,000 per year $ 298
Clerk 2.00 $60,000 per year $ 238
Warehouse 8.00 $85,000 per year $ 337
Secretary 2.00 $60,000 per year $ 238
Security 8.00 $75,000 per year $ 298
------ $ 6,984
Total Salaried Personnel 48.00

Primary Supply Requirments

Material Unit Quantity Unit Cost Cost/Day

Diesel Fuel liter/day 90,000 $1 $ 90,000
Electricity kWh/day 9600 $0.08 $ 768
Powder kg/day 63,090 $1 $ 63,090
Caps #/day 170 $12 $ 2,040
Primers #/day 170 $5 $ 850
Drill Bits #/day 4 $3,500 $ 14,000
Det. Cord m/day 1200 $2.50 $ 3,000
Cost Summary $ 173,748

Operating Costs

Supplies & Materials $/mt ore $ 3.86

Hourly Labor $/mt ore $ 2.37
Equipment Operation $/mt ore $ 1.67
Salaried Labor $/mt ore $ 0.16
Miscellaneous $/mt ore $ 0.67
------
Total Operating Costs $/mt ore $ 8.73

Capital Costs
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Equipment Purchase $ 193,475,000 start 96,737,500 96,737,500
Haul Roads / Site Work $ 14,000,000 whole time 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000
Pre-production Stripping $ 378,298,205 percentage 189,149,103 189,149,103
Buildings $ 341,000,000 assumption 170,500,000 170,500,000
Electrical System $ 32,000,000 16,000,000 16,000,000
Sustaining Capital $ 78,000,000 11,142,857 11,142,857 11,142,857 11,142,857 11,142,857 11,142,857 11,142,857
Engineering $ 25,000,000 25,000,000
Contingency $ 106,177,321 15,168,189 15,168,189 15,168,189 15,168,189 15,168,189 15,168,189 15,168,189
-----------
Total Capital Costs $ 1,167,950,526 $ 525,697,648 $ 500,697,648 $ 28,311,046 $ 28,311,046 $ 28,311,046 $ 28,311,046 $ 28,311,046
1,167,950,526
Total Process Cost $/mt ore $ 3.01 includes manpower, plant ops, power and tailings management
G&A $/mt ore $ 1.50 Office overheads, municipal fees and taxes, insurance, no labour
 Exhibit 4: Gibb Deposit - Steep Pit Cost Model

Gibb Deposit - Cost Model

Company: Diverse Minerals Co.
Consultant: WMC Consulting
Mine Type: Open Pit
Location: North Western Australia
Pit Design: Geotechnicaly Aggressive
Pit Slopes: Kimberlite 45 degrees
Country Rock 26 degrees
Till 16 degrees

\\All costs listed are in 2016 CAD$. The key design criteria, operating schedule, equipment, personnel, supply requirements and costs are listed below:

COSTS

Production

Stripping Ratio: Variable

Ore Production: 45,000 tpd
Waste Production: 129,600 tpd

Haul Distance - Ore 2,500 m

Haul Distance - Waste 3,200 m
Total Resource 56,337,609 tonnes

Hours per shift 12 Hr

Shifts per day 2
Days per year 350

Bench height - Ore 15 m

Bench height - Waste 15 m

Powder factor - Ore 0.25 kg/mt Total powder = 11250.00 kg

Powder factor - Waste 0.40 kg/mt Total powder = 51840.00 kg

Equipment

Type Number Size Unit Cost Total Cost

Hydraulic Shovels 2 43 cu m
Front-end Loaders 2 21 cu m
Rear-dump Trucks 18 240 mt
Rotary Drills 2 20.00 cm
Bulldozers 6 375 KW
Graders 2 115 kW
Water Tankers 2 9,500 liter
Service/Tire Trucks 3 1,800 kg gvw
Bulk Trucks 1 450 kg/min
Light Plants 4 8.9 kW
Pumps 4 100 kw
Pickup Trucks 5 680 kg
$ 18,000,000 $ 36,000,000
$ 4,500,000 $ 9,000,000
$ 4,200,000 $ 75,600,000
$ 1,800,000 $ 3,600,000
$ 2,500,000 $ 15,000,000
$ 750,000 $ 1,500,000
$ 750,000 $ 1,500,000
$ 250,000 $ 750,000
$ 600,000 $ 600,000
$ 35,000 $ 140,000
$ 15,000 $ 60,000
$ 45,000 $ 225,000
$ 143,975,000

Buildings

Shop sq.meters 2400

Dry sq.meters 500
Office sq.meters 383
Warehouse sq.meters 800
Anfo Storage Bin cu.meters 50

The 5th Annual World Mining Competition 2016 Case | Exhibits

 Exhibit 3: Gibb Deposit - Steep Pit Cost Model (Continued)

Development

Preproduction Stripping tonnes 145,153,175

Haul Road Construction meters 5,700

Hourly Personnel Requirments

Position Number Rate Unit Cost/Day

Drillers 4 $60.48 per hour per man $ 2,903
Blasters 4 $60.48 per hour per man $ 2,903
Excavator Operators 8 $60.48 per hour per man $ 5,806
Truck Drivers 36 $60.48 per hour per man $ 26,127
Equipment Operators 28 $60.48 per hour per man $ 20,321
Electricians 6 $72.00 per hour per man $ 5,184
Mechanics 20 $72.00 per hour per man $ 17,280
Laborers/Maintenance 12 $57.60 per hour per man $ 8,294
---- $ 88,819
Total Hourly Personnel 118

Salaried Personnel Requirments

Position Number Salary Cost/Day

Manager 1 $300,000 per year $ 1,190
Superintendent 1 $225,000 per year $ 893
Foreman 4 $175,000 per year $ 694
Engineer 2 $150,000 per year $ 595
Geologist 2 $150,000 per year $ 595
Supervisor 8 $150,000 per year $ 595
Safety 4 $150,000 per year $ 595
Technician 4 $105,000 per year $ 417
Accountant 2 $75,000 per year $ 298
Clerk 2 $60,000 per year $ 238
Warehouse 8 $85,000 per year $ 337
Secretary 2 $60,000 per year $ 238
Security 8 $75,000 per year $ 298
------ $ 6,984
Total Salaried Personnel 48

Primary Supply Requirments

Material Unit Quantity Unit Cost Cost/Day

Diesel Fuel liter/day 60000.00 $1 $ 60,000
Electricity kWh/day 9600.00 $0.08 $ 768
Powder kg/day 63090.00 $1 $ 63,090
Caps #/day 170.00 $12 $ 2,040
Primers #/day 170.00 $5 $ 850
Drill Bits #/day 4.00 $3,500 $ 14,000
Det. Cord m/day 1200.00 $2.50 $ 3,000
Cost Summary $ 143,748

Operating Costs

Supplies & Materials $/mt ore $ 3.19

Hourly Labor $/mt ore $ 1.97
Equipment Operation $/mt ore $ 1.67
Salaried Labor $/mt ore $ 0.16
Miscellaneous $/mt ore $ 2.75
------
Total Operating Costs $/mt ore $ 9.74

Capital Costs
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Equipment Purchase $ 143,975,000 start 71,987,500 71,987,500
Haul Roads / Site Work $ 12,000,000 whole time 1,714,286 1,714,286 1,714,286 1,714,286 1,714,286 1,714,286 1,714,286
Pre-production Stripping $ 243,352,435 percentage 121,676,217 121,676,217
Buildings $ 341,000,000 assumption 170,500,000 170,500,000
Electrical System $ 32,000,000 16,000,000 16,000,000
Maintenance Capital $ 78,000,000 11,142,857 11,142,857 11,142,857 11,142,857 11,142,857 11,142,857 11,142,857
Engineering $ 25,000,000 25,000,000
Contingency $ 87,532,743 12,504,678 12,504,678 12,504,678 12,504,678 12,504,678 12,504,678 12,504,678
-----------
Total Capital Costs $ 962,860,178 $ 430,525,538 $ 405,525,538 $ 25,361,820 $ 25,361,820 $ 25,361,820 $ 25,361,820 $ 25,361,820
962,860,178
Total Process Cost $/mt ore $ 3.01 includes manpower, plant ops, power and tailings management
G&A $/mt ore $ 1.50 Office overheads, municipal fees and taxes, insurance, no labour

The 5th Annual World Mining Competition 2016 Case | Exhibits

 Exhibit 5: Gibb Deposit - Production Models

Exhibit
Exhibit 5 5
GibbGibb Deposit
Deposit – Production
– Production Models
Models

Steep
Steep Pit Production
Pit Production Model
Model
Period Period 1 1 2 2 3 3 4 4 5 5 6 6 7 7
CY CY 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 2022 2022 Total Total
Mining Mining
volume,volume,
tons tons 30,000,000
30,000,000 60,000,000
60,000,000 60,000,000
60,000,000 38,676,888
38,676,888 15,066,044 14,527,758
15,066,044 14,527,758 13,550,469
13,550,469 231,821,159
231,821,159
Carats Carats - - - - - - 4,767,163
4,767,163 4,116,788
4,116,788 2,948,818
2,948,818 1,458,108
1,458,108 13,290,877
13,290,877

Shallow
Shallow Pit Production
Pit Production Model
Model
Period Period 1 1 2 2 3 3 4 4 5 5 6 6 7 7
CY CY 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 2022 2022
Mining Mining
volume,volume,
tons tons 30,000,000
30,000,00060,000,000
60,000,00060,000,000
60,000,00061,278,743
61,278,74315,247,784
15,247,784 14,571,385
14,571,385 13,638,663
13,638,663 254,736,575
254,736,575
Carats Carats 0 0 0 0 0 0 4,767,163
4,767,163 4,116,788
4,116,788 2,948,818 1,458,108
2,948,818 1,458,108 13,290,877
13,290,877

The 5th Annual World Mining Competition 2016 Case | Exhibits